Is It More Financially Savvy to Repair Your Car or Replace It?

Facing car repairs can be stressful. Not only could a broken car leave you stranded on the roadside, but costly repairs could strain your budget. As a result, you may consider skipping the repairs and shopping for a new car. But that might not be the best financial choice, depending on your situation. It’s important to evaluate several factors, including the frequency and cost of repairs, the vehicle’s age, and the affordability of other cars. Then, you can determine which option would be best for you. 

Key Takeaways

• Americans are keeping their for 14 years on average.
• The average cost for maintenance, repairs and tires is 10.13 cents per mile, or $1,520 for every 15,000 miles you drive.
• The value of your car and the cost of a new are are among factors can help determine if you should repair or replace your car. 

Americans Are Keeping Their Cars Longer

According to the Bureau of Transportation Statistics, the average age of passenger cars in 2024 was 14 years.

For light trucks, that average age drops to about 12 years. That’s almost double the average age in 2000, which was 9 years for passenger cars and a little more than 8 years for light trucks.

Auto Repair Costs Are Higher Than Ever

Car repair costs vary based on several factors including the vehicle’s age, the make and model, the type of repair, and who performs the repair. Here are the average repair costs for some common car repairs according to Kelley Blue Book:

When Is it Time To Replace Your Car?

There are several factors to consider to see if you should replace your car. 

Frequency and cost of repairs

If your car needs repairs more often, it could be time to get a new car. Or, if the car repair estimate is more than the value of your current car, it may be better to get a new car. 

Gas mileage 

Gas prices also remain high, so having a car with great gas mileage can help you save money. If your gas mileage is on the decline or your car is fuel inefficient due to its engine size, getting another car with better gas mileage might save you money in the long run. 

Residual value of car 

As mentioned above, if your repair costs are more than the value of your car, replacing your car could be the better option. 

Payoff of current car loan 

Of course, if you have an existing car loan, you will likely need to pay off that loan before you sell your current vehicle. Lenders typically use the vehicle you purchase with a car loan as collateral.

Availability of affordable cars

With the rising car prices, it may be tough to find another car, whether new or used, that fits with your budget. It might take some time to shop around to find a car you like that you can afford. In the interim, your current car may require car repairs, which could take money away from a car purchase. 

Desire for new technology/safety features 

If you want a car with the latest tech or safety features, replacing your current car might be the right choice. The deciding factor likely would be if you could afford such a car. 

Insurance costs  

The newer the car, you may face higher car insurance costs. It’s important to evaluate if you can afford the cost of new insurance premiums. 

The Bottom Line

Because car and car repair prices continue to increase, many car owners are keeping their cars longer. Deciding between repairing or replacing your car depends on many factors, including the vehicle’s age, frequency and cost of repairs, and whether you can afford a new car. It’s important to review how much it would cost to keep repairing your existing car versus how much you can afford to spend for another car. That likely will be the deciding factor between repairing or replacing your car.